TODAY'S PAPER
65° Good Afternoon
65° Good Afternoon
Business

Firm to get $16.8M in tax breaks to redevelop Newsday site

Hartz Mountain Industries plans to build nearly 1 million square feet of warehouse space on the Melville property. 

The Newsday building will be replaced with two

The Newsday building will be replaced with two warehouse and distribution facilties, the developer said.  Photo Credit: Newsday/Michael Gavin

The new owner of Newsday's longtime Melville headquarters on Thursday received preliminary approval for more than $16.8 million in tax breaks for its $190.5 million plan to redevelop the 48.3 acre site.

The Suffolk County Industrial Development Agency approved Hartz Mountain Industries' project application for the property at 235 Pinelawn Rd. 

The Secaucus, New Jersey, real estate development company purchased the site from property owner Tribune Media Co. for $54.5 million last fall. Hartz plans to demolish the existing 413,500-square-foot building and replace it with two warehouse and distribution buildings totaling nearly 1 million square feet.

Construction costs for the two buildings — one 669,186 square feet and one 276,500 square feet — will total more than $125 million, according to the company's IDA application. About $10 million will be spent on fees and charges.

Hartz owns roughly 35 million square feet of commercial industrial space around the country.

“This will be our first venture into Long Island, and we’re very excited about it,” said James P. Rhatican, vice president of land use and development for Hartz.

Rhatican said his firm anticipates leasing the buildings to two to four tenants. Based on demand for industrial space in the region and the company’s own occupancy figures, Hartz projects the completed sites will create 600 to 800 permanent jobs.

“We think there’s a strong market here, and we think there’s space in the market for this type of project,” Rhatican said.

Over the last few years, industrial properties, including warehouse and manufacturing spaces, have been in strong demand on Long Island.

Hartz has applications pending for site plan approval and variances for height and parking.

The IDA granted preliminarily approval for a sales tax exemption of up to $6.5 million on construction equipment costs for the project, a $937,500 mortgage recording tax exemption, and a 20-year deal on property taxes that starts at a 41.5 percent reduction the first year and decreases the discount by 3.25 percent per year for the remaining period. In total, the developer will save about $9.4 million in property taxes over the two-decade period of the deal. 

The savings will only apply to taxes on the building and not taxes on the land itself.

“Since it’s such a large project, the benefits are large,” IDA executive director Anthony Catapano said Thursday. “This will bring in more dollars to the region by the businesses that ultimately occupy the space.”

Even with the tax breaks, the redeveloped site will bring in more tax dollars than the current Newsday site does, Catapano said.

Newsday Media Group signed a 15-year lease in March to relocate to a new headquarters in Melville about a mile from the paper’s current offices.

Newsday plans to move to 130,000 square feet at 6/8 Corporate Center Dr., a two-building complex, around Labor Day. The buildings are owned by The We’re Group.

Comments

We're revamping our Comments section. Learn more and share your input.

More news